ANZ Group Holdings Ltd (ASX: ANZ) shares are charging higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $31.87. In late morning trade on Thursday, shares are changing hands for $32.62 apiece, up 2.4%.
For some context, the ASX 200 is up 0.7% at this same time.
Over the past 12 months, the gains in ANZ shares have matched the returns from the ASX 200, with both the benchmark index and the ASX 200 bank stock up just over 13% in a year.
Of course, that doesn't include the $1.66 a share in partly franked dividends ANZ has paid to eligible stockholders over the year. At the current share price, ANZ is trading on a trailing dividend yield of 5.1%.
With this picture in mind, here are four reasons Catapult Wealth's Blake Halligan is optimistic on the outlook for ANZ in the year ahead (courtesy of The Bull).
Should you buy ANZ shares today?
"This major bank released better than expected results for the first half of fiscal year 2025," said Halligan, who has a buy recommendation on ANZ shares.
Highlights from ANZ's H1 FY 2025 results, reported on 8 May and covering the six months to 31 March, included revenue of $10.995 billion, up 5% from H2 FY 2024. And the bank's cash profit of $3.568 billion was up 12% from the prior half year.
Citing the first two reasons you may want to add ANZ to your portfolio, Halligan said, "Among the big four banks, ANZ is the most attractively priced and was recently trading on an appealing dividend yield."
We looked at ANZ's 5.1% dividend yield above.
On the pricing front, ANZ shares trade at a price-to-earnings (P/E) ratio of around 14 times.
By comparison National Australia Bank Ltd (ASX: NAB) shares trade on a P/E ratio of around 17 times; Westpac Banking Corp (ASX: WBC) shares trade on a P/E ratio of almost 18 times; and despite the recent share price retreat, Commonwealth Bank of Australia (ASX: CBA) shares still trade on a P/E ratio of almost 31 times.
Moving on to the third reason Halligan is bullish on the outlook for ANZ, he said:
The new chief executive has been restructuring the business and integrating Suncorp Bank. If the ANZ can demonstrate that non-financial risk management is improving, it may be able to free up substantial capital for further opportunities.
And the fourth reason ANZ shares could enjoy a strong run in the year ahead is further potential rate cuts from the RBA.
"Potentially falling interest rates should be positive for the entire banking industry," Halligan said.
While lower rates could pressure the banks' net interest margins, they should in turn support household and business lending growth.
